Correlation Between Xinjiang Baodi and Chengdu Kanghua
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Xinjiang Baodi and Chengdu Kanghua and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Xinjiang Baodi with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Chengdu Kanghua.
Diversification Opportunities for Xinjiang Baodi and Chengdu Kanghua
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinjiang and Chengdu is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and Xinjiang Baodi is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Xinjiang Baodi Mining are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Chengdu Kanghua
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to under-perform the Chengdu Kanghua. In addition to that, Xinjiang Baodi is 2.22 times more volatile than Chengdu Kanghua Biological. It trades about -0.16 of its total potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.09 per unit of volatility. If you would invest 5,260 in Chengdu Kanghua Biological on November 3, 2024 and sell it today you would lose (134.00) from holding Chengdu Kanghua Biological or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Chengdu Kanghua Biol |
Xinjiang Baodi and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Chengdu Kanghua
The main advantage of trading using opposite Xinjiang Baodi and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Chengdu Kanghua can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
| Chengdu Kanghua vs. Baoding Dongli Machinery | Chengdu Kanghua vs. Marssenger Kitchenware Co | Chengdu Kanghua vs. Shantui Construction Machinery | Chengdu Kanghua vs. Yindu Kitchen Equipment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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